It is a little known fact that for the period 1980-90, the office market in the North performed twice as well as the UK office market as a whole. Secondly, in the past 12 months, prime office rents in Belfast have grown by over 20 per cent, making it one of only two major cities in the UK (the other being London's West End) to enjoy significant growth in the last year.
Of course, Dublin's office rents have spiralled also, perhaps putting Belfast's performance a little in the shade. However, after too many years of stagnation, the office market in Belfast has followed its retail counterpart and seems set to continue its steady growth for some time to come.
From levels of £10 sterling a sq ft last year to over £12 this year, prime office rents may well reach £14 a sq ft within the next six to nine months and should reach £17 to £18 levels in the next four years.
Two questions need to be answered: what is driving the growth and can it be sustained?
Obviously, increased political stability in the North has provided many new opportunities, although an improving economy and higher levels of inward investment were evident even before the ceasefires. The key factors, however, are much enhanced demand from local occupiers both for more space and, more importantly, better quality space and increased investment from overseas - and also from this State and the UK.
The developers are responding. This year, Dunloe Ewart finished its refurbishment of 39 Corporation Street, providing fully air-conditioned, high specification offices, with all 38,000 sq ft being promptly let to US software giant Northbrooke Technology at £12 per sq ft.
Next year, Dunloe Ewart will finish the first phase of almost 300,000 sq ft of prime office space at Lanyon Place - begun speculatively but it is highly likely to achieve record rentals for Belfast before completion. Millennium House, the 150,000 sq ft building under construction by McAleer and Rushe in Great Victoria Street, is also likely to achieve similar new rental levels on completion next year.
There are others. For instance, Cusp's gasworks site and Finbrook's development of Abbey National's new customer service centre beside Belfast's main rail station. The emphasis is on quality and prime location and the demand clearly exists. Both Prudential and Grant Thornton, for instance, are occupying two new rival river-front buildings at Clarendon Dock. And, The arrival of Regus, the serviced office provider which opens its 30,000 sq ft unit in October, is also indicative of the strong demand.
Outside the city, in places such as Sydenham Business Park, owned by the Belfast Harbour Commissioners, and stretching out along the main road to the satellite towns of Bangor and Holywood, space is in short supply. Companies such as ntl, BIC systems, ICL and Phoenix Gas, have all filled impressive buildings in recent years.
As with Dublin, the pressure is on ambitious companies to provide the quality work environments that will improve production levels, send the right corporate message and help to retain key staff. Belfast is, therefore, now able to make a compelling offer on two fronts. The growing market represents a tremendous opportunity while, as a location for inward investment, Belfast still offers the cheapest prime office rents of any major city in the UK and considerable value also in comparison with its larger southern neighbour.
Guy Hollis is chief executive of commercial agent Richard Ellis Gunne.
